Loan Against Insurance Policy: During the Corona period, many people had to face difficult financial conditions. While a large number of people lost their jobs, the business of many people also came to a complete standstill. In such a situation, a person feels a shortage of money. During the financial crisis, the first thing a person thinks about is taking a loan.
Loan Against Insurance Policy: People look for many options to take a loan, taking a loan against insurance policy is also one of them.
The good thing is that taking a loan against health insurance policy is also a better option because loan against insurance policy is very easy to get, and the interest on it is also less. Individuals can take this loan through bank or non-banking financial institutions (NBFC).
How much loan can be availed
How much loan can be availed depends on the type of policy and its surrender value. Usually, one can avail loan up to 80-90% of the surrender value. However, this much loan is available only if the policy is a money back or endowment policy.
Surrender value
If you surrender a life insurance policy before the full term, you get back a part of the amount you have paid as premium. Charges are deducted from this. This amount is called surrender value.
Interest
The interest rate on the insurance policy depends on the amount of premium and the number of premiums paid. The interest rate on a loan against life insurance is between 10-12%
If the loan is not repaid
If there is a default in repayment of the loan or in paying the premium, the insurance policy will lapse. The policyholder will have to pay the premium along with the interest on the loan taken against the policy. The insurance company reserves the right to recover the principal and outstanding interest from the surrender value of the policy.
